Atlanta Named Nation’s Third Greenest City in CBRE Study

ATLANTA, GA—Atlanta maintained its standing at third place on the annual US Green Building Adoption Index by CBRE and Maastricht University this year, marking its fifth consecutive appearance in the top five.

Atlanta has risen two spots since the study’s inception, when Atlanta ranked fifth. The city has experienced a broad-based movement towards green certification with 58.43 percent of all space now certified, a six percent increase from the prior year.

CBRE found green-certified office space across America’s 30 largest metros has reached 41 percent of market totals—the highest in the index’s history. “Green” office buildings in the U.S. are defined as those that hold either an EPA Energy Star® label, USGBC LEED certification or both. According to the report, 11.5 percent of all buildings surveyed are Energy Star labeled, while five percent of buildings are LEED certified, both at all-time highs in the five-year study.

“Green buildings with top amenities can have a tremendous impact on their tenants as they are designed to fulfill advanced connectivity demands, one of the most critical requirement for tenants when selecting office space,” says Marie Kastens, CBRE asset services managing director. “One prime example in Atlanta’s Central Perimeter market is 7000 Central Park, an 18-story office building with an Energy Star label that was named the 2018 Georgia Outstanding Building of the Year Award through the Building Owners and Managers Association.”

Atlanta’s biggest increase came in the percentage of LEED square footage where the metro’s 24.2 percent total was seventh overall, up from 10th last year. Additionally, Atlanta also placed in the top three in Energy Star square footage percentage once again, with 52.6 percent certified. At 27.1 percent, Atlanta trailed only Manhattan in the percentage of all buildings holding an Energy Star Label. These were the only two markets that more than doubled the national average of 11.5 percent in this category. Additionally, Atlanta was one of only four markets with more than 50 percent of all space Energy Star labeled.

Chicago again claimed the top spot with nearly 70 percent of its space green certified. In addition to defending its title as the nation’s greenest city, Chicago saw a difference of nearly six percent with second-place San Francisco, the largest spread ever recorded in the Green Building Adoption Index. Atlanta maintained the third spot with more than 58 percent of all space green certified, while a surging Los Angeles claimed fourth – up from sixth last year. Minneapolis rounds out the top five with 55 percent of office space certified.

Continued improvement in average energy efficiency for the nation’s commercial buildings also prompted the EPA to change the underlying calculations for Energy Star scoring this year. This change is expected to lower average scores for office buildings by as much as 10 points next year. These changes may have a significant impact on next year’s Green Building Adoption Index rankings, particularly for markets whose Energy Star certifications comprise the bulk of their green space.

“Green building certifications have become an important proxy for sustainable practices, recognized by all stakeholders. Any significant change to one of these major certification programs can have a significant impact on the buildings affected. We will be closely watching for the results,” says David Pogue, CBRE’s senior vice president, global client care.

CBRE and Maastricht University researchers note that building certification has become a more recognized and important part of a building’s profile. As these programs reach maturity, the capital markets are increasingly incorporating these certificates into loan pricing and alternative financial instruments such as green bonds. And, according to additional research by Green Building Adoption Index co-author Rogier Holtermans, buildings certified by Energy Star and/or LEED have been shown to transact for about 10.1 percent more than non-green certified buildings.

Notable sales of green certified buildings in Atlanta in 2017 include the trading of 100 Peachtree, a LEED Silver certified office tower in Downtown that sold to Zeller Realty Group for $85.4 million. Another notable transaction was LEED Silver certified Crown Pointe, a 500,000-square-foot office campus in Atlanta’s Central Perimeter, which sold to KBS REIT for $83.4 million.

“The demand for more efficient, green buildings among investors is growing every year, mostly due to their positive impact on financial performance and desirability from tenants,” says Will Yowell, vice chairman and office investment sales lead at CBRE. “Many of our offerings in the Atlanta market have been LEED or green certified buildings and we’ve received very strong investor interest, both from domestic and offshore capital sources.”